Response to interpellation 2024/25:685 on measures for increased growth
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
1 M argues that the government is implementing an enhanced earned income tax credit for low and medium incomes which provides good multipliers and speeds up the economy 1. M emphasizes investments in research, innovation, infrastructure, and new nuclear power for long-term growth 1 2 as well as that tax cuts for high-income earners are important 2 3. 4 S argues that the government's policy leads to poor growth, high unemployment, and that ordinary people are becoming poorer 4. S argues that investments in welfare are good for growth 4 and that the government's tax cuts primarily benefit high-income earners 4 5. 6 S considers that the policy has not been effective for growth 6. 7 M argues that the government has lowered the tax for nurses, assistant nurses, bus drivers, and administrators 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Björn Wiechel has asked me if I draw any lessons from the economic developments of recent years and the Fiscal Policy Council's discussion regarding fiscal multipliers. He has also asked me whether I and the government will, going forward, begin to prioritize measures that increase growth.
Just as Björn Wiechel points out, it is important to think twice about where the money is spent to increase growth. Among other reasons, the government has implemented an enhanced job tax credit with a focus primarily on low and medium incomes. The government's policy has contributed to a family with a police officer and a nurse receiving 23,000 kronor in lower taxes since 2023. That makes a big difference when the rent is to be paid, and as Wiechel points out, it provides good multipliers. It speeds up the economy.
We are also strengthening vocational training and re-establishing the work principle by, among other things, strengthening the control of job seekers and increasing the economic incentives for self-sufficiency. We have presented the largest investment in research and innovation ever. Furthermore, the government is clearing up complicated regulations and working to ensure that the tax system encourages entrepreneurship.
That is why the government has presented proposals that improve and simplify tax rules for small businesses. The Ministry of Finance has also recently published a memorandum with proposals for reduced taxes for companies. We need to strengthen the conditions for investment and growth. High growth also requires good infrastructure. We have presented a historically large infrastructure bill and begun the path towards new nuclear power.
That Swedish growth would be at the bottom of the EU's ranking is not correct. This year, the Swedish economy is expected to grow at the same rate as in the EU, and in 2026, Sweden's economy is judged to grow faster. We shall continue that journey. For it is only with a growing economy that we can finance the welfare of the future.
Björn Wiechel (S)
Madam Speaker! Thank you, Minister for Finance, for the answer!
The reason I have submitted the interpellation is that the Fiscal Policy Council has issued a report. In that report, it is pointed out that the government should to a greater extent report and take into account multipliers, i.e., what effect different measures have on growth.
What I wonder is whether the government is drawing any lessons. The result of the government's policy is, in fact, poor growth, sky-high unemployment, and that ordinary people are becoming poorer. One realizes from these multipliers that the government's failure lies in the political choices. I intended to take a few examples.
Investing in welfare is good for growth. Everyone who engages in economics knows that, and it is not inflation-driving. But what is the government doing here? Yes, large cuts to school and healthcare.
It is known that the government has created a national healthcare crisis with large-scale layoffs. It is of course bad for security, but also for growth.
The government's answer is therefore not to rethink and allocate more, but now they want to encourage doctors to resign and switch to becoming locum doctors instead. It is that system that fragments and makes healthcare more expensive. One is a bit stunned, Madam Speaker!
Furthermore, the government emphasizes its "work line" in the response, but it has been found to be outdated and ineffective. It has not lowered unemployment and today has a minimal employment effect, which the Fiscal Policy Council has also pointed out. More of the same here would only be expensive and not good for jobs and growth. Nevertheless, it is what the government points out.
I see no lessons here either. The investments that the government does make, and which are highlighted in the response, on innovation and vocational training may be commendable. The problem is that the government started by significantly cutting back on these areas when they were needed most.
Now they are adding a little, but not so much that it increases the total. It is deceptive. That kind of behavior, where they remove a lot and then put back a little – or as the government also does, calling things an "investment" even though it does not involve a real increase – is a numerical trickery that has also been criticized.
Then it is about the taxes. It is obvious to most that tax cuts for those who need the money most, low- and middle-income earners, have the greatest effect, because they use them.
But the government chooses to specifically lower the tax mostly for those who earn over 65,000 kronor a month, and this is happening at the same time as ordinary people are struggling to make ends meet.
Again: The government's measures are ineffective. Point by point, the economic policy is worse for growth. We see the results. However, I hear no self-criticism.
The Minister for Finance is welcome to explain the motives for the targeted tax cut for those with incomes over 65,000 kronor per month. Based on multipliers and the effect on growth, and in relation to other measures: Is it really the best? Or will the government reconsider its policy?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you, the interpellor, for the question! It is very important and very good. It is not every day that one gets to talk about multipliers in the chamber of the Riksdag – just such a thing!
Let me bring this down to what I mean is the task of fiscal policy, and naturally also the task of the budget. For a part of fiscal policy, it is about devoting oneself to three things in different situations.
Fiscal policy is structural policy, that is to say, making it so that growth can increase.
It is distribution policy and that one ensures that the proposals one puts forward also have effects on the distribution.
At the same time, it is naturally stabilization policy. It is actually about cyclical fluctuations. When inflation was high – for we inherited a very high inflation, Madam Speaker – stabilization policy was very important for the government. It was important to be able to hold back and ensure that inflation was dampened. These are the parts of fiscal policy.
When one presents a budget, Madam Speaker, one does so based on the situation that prevails and what needs to be done at that time. When we have negotiated and presented our three state budgets, we have done so with two different focuses.
It is about here and now, that is to say, ensuring that we support the households that do not have different types of indexations and compensate them for high inflation. We have lowered taxes, as I mentioned earlier, and the reduction obligation has changed dramatically. We have done many things to collectively strengthen households. But that being said: Many are still having a tough time.
However, one must simultaneously be able to have thoughts in one's head about what we can do so that growth gets started and also becomes stronger in 5, 10, and 15 years. In that regard, there are things that many governments have failed to do. Here we have now focused, as I said, on research, on infrastructure, and on energy systems to get more clean electricity.
We are also looking over the tax system, where we have lowered taxes for everyone for two years in a row. It is a job tax credit with a focus on low and medium incomes. But we have also, absolutely, lowered the highest marginal tax. Even the Social Democrats thought a number of years ago that no one should have to pay more than 50 percent tax on the extra earned thousand. That idea is no longer prevailing. But just to have it said: We have a progressive tax system. The person who earns 125,000 kronor, I believe, has eleven times as high a tax as the person who earns 25,000.
So yes, one pays more when one earns more. One can have different opinions about that. But this is one of the things, if we are to listen to our investigations and authorities, that is also important for growth. It is about the fact that we have marginal taxes that encourage higher education and work.
The government is therefore doing a number of different things in different areas, both to get the economy moving here and now and for the economy to grow in the long run. I am glad that the Social Democrats now seem to have developed a strong interest in growth.
I heard that people also talked about productivity at the congress. I applaud that, and I am truly pleased. It is not irony now, Björn Wiechel, but full seriousness. This is very, very good, because it is only through increased productivity and more hours worked that Swedish growth can increase.
Björn Wiechel (S)
Madam Speaker! Thank you to the Minister for Finance, once again, for the answer and the discussion!
It is true that inflation has gone down, and that is because households have lost purchasing power as their wages have been lowered. It is the households that have lowered inflation.
What has the government done then? Well, they have supported certain people, above all high-income earners. That is the problem. If one is to help society through difficult times, it matters who one helps. It has different growth effects. It matters what the government does. Here, the government has chosen to support the rich, and it also has a very poor employment effect. That is where the core of the issue lies.
The answer does not quite provide reassurance regarding the government's intention to rethink in these respects and moving forward invest in what actually creates growth.
Yes, you are lowering taxes for more people; that is quite true. But large groups who work hard get very little, while the government is making enormous tax cuts for the rich. It is a problem.
I come from Västerbotten. In large parts of the county, it is barely one in a hundred who receive a share of the government's tax cut aimed at the wealthy. At the same time, every sixth resident in places like Danderyd receives a share of it. But it is paid for by the people of Västerbotten through less money in the wallet, worse healthcare, and lower growth.
The Social Democrats have, in our budgets, presented proposals that hit the mark. Our budgets would have yielded more growth if they had been the ones to prevail. There would also have been increased justice and cohesion, which are important values for us.
We have a fair tax cut, where ordinary families get more money in their pockets. The government usually highlights the police-nurse family as an example. With our policy, they would have received more. We direct efforts to those in need. We maintain housing allowances, and we do not worsen the high-cost protection as the government does. It is both fair and effective.
We give more to healthcare to retain staff and capacity. As we have noted, it has good socio-economic consequences. We make public investments, such as proper housing construction. We have a serious labor market policy with a modern work line that tackles the problems in the labor market, which gets people into jobs and raises wages.
What I wish for is a finance minister who takes in this criticism and who weighs in the evidence and the empiricism in their policy, if one wants to create growth. We see the result: the growth is poor. We have sky-high unemployment. We have ordinary people who are becoming poorer. We see incorrect choices.
This is a failure. It is not something one can shrug off, but it has to do with own choices – the own policy. That the Finance Minister does not declare that one intends to reconsider this is something I regret. It also testifies to that one puts other interests first. One puts special interests, and perhaps self-interests, before a general interest. It is regrettable, quite simply.
With this said: The result of the policy is what it is, and it gives reason for reconsideration. I mean that Sweden needs a new direction for the economic policy.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Let me just point out some important facts. If one sits in the Committee on Finance or if one is the Minister for Finance, one should naturally stick to the facts. That should apply to everyone.
Fact, Madam Speaker, is that we inherited high inflation and high unemployment. We also inherited low growth. Inflation is being pushed down. That is due to the fiscal policy; that is also what the Fiscal Policy Council and others say. Together with the Riksbank and the parties, we took a great responsibility. I have said that many times. We took a collective responsibility and did things together. That is the first thing.
The second is growth. We know that Sweden is an interest-sensitive economy. But we saw at the end of last year that the recovery began. Both our forecasts and other forecasts indicate that Sweden will be at an EU average this year, but also that we did that already last year. We are therefore not the worst in the class. That was us a few years ago, but it is actually not us anymore. I think, Madam Speaker, that there can be a point, at least if one sits in the Committee on Finance, in sticking to the correct growth figures.
Let us look at the IMF, the Currency Fund. They make the assessment that Sweden this year will have a growth that is significantly higher than the Eurozone countries. We do not know until afterwards who is right. But much is going in the right direction in Sweden because we have addressed the fundamental problems.
Number one is that it must pay to work. I think, Madam Speaker, that it is provocative when one hears that the government does not stand on the side of the wage earners. I have been here in the Riksdag for 19 years, in opposition and now in a government position. I submit proposals. I have made decisions together with many colleagues that have ensured that a nurse in Sweden, man or woman, has 4,000 kronor more per month thanks to our job tax credits. It is money that makes a difference.
The Social Democrats are now trying here to give the impression that they want to lower taxes for everyone. One only has to listen to your congress that took place over the weekend. It was a left turn that is unacceptable! Here, people are talking about tax cuts. At the congress, they want to raise all taxes, more or less. Here, people are talking about strict immigration, but those they want to cooperate with want more people to come here. Now, perhaps Madam Speaker thinks I am going a bit outside the scope of the interpellation, but I will come back.
Growth, Madam Speaker, comes by doing different things. It is about taxes, the tax system, the energy system, infrastructure and much more. It is exactly this that we do. Every day, Madam Speaker, when I go to work, I have the Swedish economy and the Swedes' economy before my eyes.
I understand that the Social Democrats do not always like what I do. We come from different parties, after all. But the focus for me and others in the government is that the Swedish economy should grow, because it is only a growing economy that can sustain and finance the future's welfare, defense, and police.
Björn Wiechel (S)
Madam Speaker! That Sweden's growth is no longer the worst but just very poor is possibly a thin straw.
What I was looking for was to look at the policy one is conducting. When it is evaluated and measured and one sees, in black and white, that it is not effective if one wants to create growth, does one then draw any lessons from that? That was the starting point for my interpellation, not to hear talk about other things or blaming the outside world. The policy that has been conducted has not been effective for creating growth, and I was looking for a reasoning about that.
The policy has not been correctly balanced, quite simply. We can read it in reports, but we can also read it in the results. We have bankruptcies. We have sky-high unemployment. We have really poor growth. We have people who are becoming poorer in this country. Sweden is heading in the wrong direction. The results speak for themselves. It is a failure, and it is rooted in political choices.
There are things that could make it better, if one wants to. There are alternatives. There are clear alternatives. We Social Democrats want that. That is why we have proposed it time and again, consistently and constantly. Our starting point is that we cannot accept that ordinary people become poorer, that unemployment is at a record high, and that growth is so poor.
Sweden needs a new direction for the economic policy. The results show it, the evaluations show it, and the needs show it.
I sought a self-reflection: Are any lessons to be drawn from the policy pursued? That was the starting point for my interpellation.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you again, Björn Wiechel, for a good debate! It is important to have, and it is also funny – we are talking about too little growth in Sweden, I think.
What is the government doing, Madam Speaker?
Today, the fuel is approximately 10 kronor cheaper per liter than when we took office. A large part of that is due to the government. That makes 500–600 kronor on a tank.
Today, a nurse, a nursing assistant, a bus driver or an administrator here at the Riksdag has a lower tax than when we took office. We have lowered it for two years in a row.
Now one also has the first 150,000 SEK tax-free when one saves or invests in an ISK. This, in turn, also provides a return when one invests these funds, as many do in Sweden.
Today we have presented and passed a decision in the Riksdag on the largest investments in infrastructure and research that have ever been decided.
Today we move forward with ensuring that Sweden gets nuclear power so that Swedish companies have the electricity they need and so that we can transition as we want and can.
When it comes to the companies and especially the smaller companies, Madam Speaker, we have now expanded the growth support to apply to two people and not just one. We have also just presented a proposal for new 3:12 rules that reduce the administration and lower the tax.
This, Madam Speaker, is some of the initiatives that we have made just during these years. It makes a difference for entrepreneurship, it makes a difference for households and it makes a difference for Sweden.
Every day – and I really mean it – when I go to work, Madam Speaker, I have the Swedes and Sweden before my eyes, whether one voted for any of our parties or not. We have a responsibility to pursue a policy that increases growth so that future generations can also share in all the things we share in and even more.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.